Business | Automotives

Ferrari focus remains on manufacturing

Ferrari stores worldwide generate 70m euros a year

By Ashley M. Hammond, Staff Reporter

Published: 15:20 May 9, 2013

Maranello, Italy: Merchandising won’t take priority over car manufacturing at Ferrari even though a new theme park was discussed on the sidelines of an announcement to limit vehicle production on Wednesday.

In a bid to “maintain exclusivity of the brand” Ferrari chairman Luca Cordero di Montezemolo announced that fewer than 7,000 vehicles would be made in 2013. That’s despite posting net profits of €54.7 million for the first quarter of 2013, up 36.5 per cent on 2012, when they sold 7318 units. It’s the first time the Italian car giant has slowed production since 2003.

Montezemolo said: “In order to preserve exclusivity sometimes you must be brave enough to manufacture a lower amount of cars. We decided this in order to keep the value of second hand cars high by not flooding the market.

“Also we want to show we are a manufacturer that can sell less cars but still post higher profits. Exclusivity is paramount to add value to our products.”

After hearing 95 products with Ferrari’s prancing horse logo were sold every minute, Montezemolo was forced to deny a shift in focus, given that these changes were announced along with the Ferrari Store’s repositioning into more luxury tailor made clothing. This also came on top of news that the Italian car giant wanted to launch a second theme park after the success of Abu Dhabi’s Ferrari World.

Andrea Perrone, senior vice president of brand leadership told Gulf News: “The Ferrari Store in Abu Dhabi is not only the biggest store we have but also the most productive. We do roughly €1 million per month. Our total income from 60 Ferrari Stores worldwide is over €70 million per year.”

Last year Ferrari World attracted 800,000 visitors and this year it is targeting one million, up 50 per cent from projected targets before its 2010 opening. Although Perrone couldn’t discuss how much money the theme park generated, he did laud it a success that should be replicated.

“We’ve been approached by many different countries around the world and we are looking at that business as an opportunity to leverage the brand. I can’t disclose the location but there will be another theme park within two years,” Perrone added.

Montezemolo consequently denied car manufacturing would take a back seat. “Although we appreciate our merchandising sector we manufacture sports cars. We won’t have a higher number than 60 stores worldwide. Merchandising is very important as it accounts for €50 million per year as a bottom line but it still can’t be compared with our core business.

“Ferrari won’t become a retail company manufacturing t-shirts, it will still manufacture cars but I believe the [auto] industry and the service industry must work hand-in-hand. Ferrari is an example of a company that needs services to grow and the service industry needs it too,” he added.